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Missed an EMI due to Covid-19? Here's what you need to do


The outbreak of novel coronavirus has been one of the most challenging and unprecedented crisis the world has ever dealt with. It has affected our normal lives as well as the country’s economy negatively. The crisis has also resulted in widespread layoffs, pay cuts and loss of business, adding to the financial woes of common people.

This was why, in 2020 the Reserve Bank of India had announced a moratorium - an act of postponing or deferring an activity that should not be confused with a waiver, on repayment of credit card and EMI dues for a period of three months. However, the central bank later extended the moratorium period till 31st August. 


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Now, in 2021 when that relief period is over, and the monthly repayment option has kicked in, many borrowers are stuck with a meager amount in their savings account. This has resulted in an increase in the number of defaulters today. So, if you are someone who is going through the same crisis, and has missed an EMI due to Covid-19, here are a few things you should consider:

1. Use your savings:

The first option is to depend on your savings account, or your FD (Fixed Deposit) and RD (Recurring Deposit) to make your EMI payment, simply for the reason that the interest you earn on these would be much less than the interest you will have to pay if you miss multiple deadlines.

2. Withdraw from PF:

Due to Covid-related stress, the Labour Ministry, in 2020, released a message to the subscribers of the Employees’ Provident Fund Organization (EPFO) to withdraw a certain portion of their retirement savings. Now, subscribers can withdraw 75% of their savings or up to three months’ basic wage, plus dearness allowance (DA) from their PF account, whichever is lower.

3. Liquidate assets:

To arrange funds for your next EMI, you can liquidate your assets. Consider the option of selling gold, or automobiles, furniture and gadgets that are not frequently used.

Alternatively, you can also consider taking a personal loan. Once your instant personal loan gets approved, you can pay off the high-cost debt within a single payment. And once you have crossed that hurdle, you can pay off your personal loan in affordable EMIs.

4. Take a loan against insurance policy:

At this stage, your life insurance policy can come to your aid. Simply, opt for a loan against the insurance policy to pay your EMI on time. Not only will your bank approve of this kind of loan quickly, but the debt would be comparatively much affordable, as the rate of interest on the loan against an insurance policy is much cheaper.

5. Look for family support:

Quite often, we have a helping hand closer than we realize. So talk to your friends and family and tell them about your financial crisis. This option is quite advantageous as:

  • You won’t have to pay any interest.
  • You will have a less scrutinizing lender to work with.
  • You will not accrue any penalty on the interest that you are not able to repay on time.

Once you have cleared all your debts, consider opening a savings account specially reserved for a rainy day. After all, it’s best to be prepared at all times. 



The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.